Innovative Finance for Children and Young People | UNICEF China

[Gunnar Larson]

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https://www.unicef.cn/en/stories/innovative-finance-children-and-young-people


Innovative Finance for Children and Young People

UNICEF and UNDP launch joint research on a Child Bond Standard

Children playing in schoolyard, China
UNICEF China

Available in:
中文
English

Innovation comes in many forms. To help finance the needs of children,
UNICEF and UNDP are developing a Child Bond Standard, that will cover the
areas of education, health, nutrition, water, sanitation and hygiene. The
standard will facilitate the issuance of child bonds, as well as serve as a
way for financial markets and bond verifiers to measure a bond’s impact on
children.

More than 40 per cent of the world’s population is under the age of 25.
Meeting their needs is crucial to achieving the Sustainable Development
Goals (SDGs). Although many socially responsible corporations and financial
institutions have started aligning their activities with the SDGs,
children’s rights are often not integrated into business activities and
there are large financing gaps. There is a need for financial instruments
and commonly accepted methodologies that both mobilize financing for
children and measure the impacts of such investments on children and young
people.

The Child Bond Standard will include a catalogue to identify and screen
projects, measures to evaluate and rate them, metrics to assess their
impacts, and principles to conduct information disclosure. The standard is
intended to be global, and it will be tested in developing economies
initially and rolled out worldwide. The standard will be used in project
design to ensure a child-focused approach will be adopted, and after
project implementation to measure whether there is a positive and lasting
impact on children. UNICEF and UNDP are not going to issue or verify bonds;
they are producing an industry standard for issuers and verifiers.

The project will draw on experience from the development of the green bonds
market in China in recent years and the SDG Bonds Standard project at UNDP.
This collaboration combines the strengths of the two UN agencies: UNDP’s
expertise on developmental policy and its platform for the SDG Bond
Standard; UNICEF’s framework for integrating children’s rights into impact
assessments and its unique technical expertise in education, health,
nutrition, water, sanitation and hygiene (WASH).

On 28 April 2020, UNICEF and UNDP brought together 40 experts from
international standard setting agencies, research and financial
institutions, and young people for an online meeting to kick start the
Child Bond Standard project.

Developing this standard will require collaboration between international
standard setters, research institutions, financial institutions and UN
agencies. Financing is an important driver for achieving the SDGs. This
challenge is not just about mobilizing funds and closing financial gaps.
There is also a need to fundamentally realign financial markets and systems
to prioritize the SDGs. The Child Bond Standard is an important step in
this direction, offering an ambitious initiative for moving towards
defining SDG-enabling finance for children’s well-being, and assessing the
impacts of projects on children’s development.

The first draft of the standard is expected by mid of 2021, with the final
standard ready by the end of 2021 after a wide range of industry
consultations. It is expected that the first pilot child bond will be
issued by financial institutions in 2021 based on the Child Bond Standard.

Mr. Shouqing Zhu, Senior Adviser of UNICEF China and Mr. Devanand Ramiah,
Deputy Representative of UNDP China will lead the technical committee.

UNICEF and UNDP are calling upon financial institutions and other
interested stakeholders to join the technical committee to develop the
Standard and prepare projects for bond issuance.
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